Vivek Kaul
Rahul Gandhi is a fan of the famed Toyota Way. The Toyota Way is a series of best practices that underlie the managerial approach and the production system of the automobile company Toyota. This management philosophy grew out of the Toyota Production System.
As Aarthi Ramachandran writes in Decoding Rahul Gandhi “According to Dr Jeffrey K Liker, the author of theThe Toyota Way, one of the most authoritative books on the subject, its core principle was that ‘the right process will produce the right results. It aimed to do this by eliminating ‘waste’ in the production process to almost nil. It held that ‘standardized tasks are the foundation for continuous improvement and employee empowerment.”
Rahul and his team are trying to build a similar sort of system within the Congress which would make standardisation possible. The idea is to build systems and process which would keep working irrespective of whoever is incharge.
Or as Rahul Gandhi put it at a convention of All India Congress Committee(AICC) in November 2007 “If we are to truly develop leaders of whom this nation is proud, we need to do two things. The first is to build an organisation that is open and relevant to the broad range of Indians who believe in our values and seek to serve the nation. The second is to build a meritocratic organisation. Young people bring tremendous passion and energy into our organisation.”
The idea it seems was to move Congress beyond the appointment system, where only sons, daughters, relatives and loyalists of senior leaders could hope to make it through to the upper echelons of the party.
In order to do this Rahul and his team have gradually taken over the administration and the running of the Congress party, over the last five to six years. In the process, they have managed to alienate the old timers of the party. Also, the idea has been to bring some sort of measurement into political leadership.
As Rasheed Kidwai writes in 24 Akbar Road “Team Rahul is also believed to be working on a plan that aims to reward performance and quick response. Ticket aspirants who can produce excel sheets on Aadhar cardholders and cash-transfer beneficiaries in their constituencies are likely to have the edge over those armed merely with recommendations from regional bosses.”
This has led to the old timers in the party getting very uncomfortable with Rahul’s laptopwallahs. As The Economic Times reports “A growing worry is Rahul’s penchant for picking teams which party veterans term strange. In some circles, Rahul’s personal team members such as Kanishka Singh, Sachin Rao, Kaushal Vidyarthi and K Raju are jokingly referred to as “aliens who want to do mass politics through data on laptops, just as those wiz kids who led Rajivji up the garden path.”
But whatever it is that Rahul is trying to do, doesn’t seem to be working. The party has lost elections in Uttar Pradesh, Rajasthan, Madhya Pradesh, Delhi and Chhattisgarh under his leadership. This means that the party has been been wiped out in the big states of North and Central India. In Uttarakhand the party just about managed to form the government, with the help of independents.
There are several reasons why Rahul’s Toyota Way isn’t really working for the Congress. It is worth remembering that the Congress is a party which thrives on dynasts and their chamchas. As Ramachandra Guha explains this in an essay titled A Short History of Congress Chamchagiri which is a part of his book Patriots and Partisans.“Most Indians are too young to know this, but the truth is that until about 1969 the Congress was more or less a democratic party,“ writes Guha.
But after that Rahul’s grandmother Indira Gandhi took over the party and made it a family run concern. As Guha writes in the essay Verdicts on Nehru which is a part of the same book “Mrs Gandhi converted the Indian National Congress into a family business. She first bought in her son Sanjay, and after his death, his brother Rajiv. In each case, it was made clear that the son would succeed Mrs Gandhi as head of Congress and head of government.”
While Gandhis were the dynasty at the top of the hierarchy, there were several other dynasties that kept the party running in different parts of the country. And this over the decades has led to the Congress party becoming a ‘property for dealers’.
Bharat Bhushan writing in the Business Standard uses this term quoting an anonymous Congress leader. As he writes “The same Congressman who saw hostile public sentiment reaching cyclonic proportions, lamented, “We are not a party but a property. A party has leaders; a property has only dealers. All the dealers are looking to their own benefit in the Congress. There is no public purpose left.” Now that is the way the party has evolved and suddenly expecting to start attracting public spirited individuals who care about the people of this country is rather naïve.
Over and above this Rahul has made it very clear that he is looking to induct youth into the party. As he has said in the past “our political organisations are designed in such a way that youth cannot enter them…The most important job in Indian politics is to get youth into Indian politics.”
During the last few years, Rahul and his team were working on this by trying to get internal elections held for the Youth Congress all over the country. In the first election which was held in Punjab, with the help of retired election commission officials, Ravneet Singh Bittu, the grandson of the late Beant Singh, a former Chief Minister of Punjab, was elected.
This was a trend that has since been repeated all over the country. Ramachandran gives a series of such examples in her book on Rahul. As she writes “In Haryana, Chiranjeev Rao, son of senior minister Ajay Singh Yadav won the polls. In West Bengal, Mausam Benazir Noor, niece of veteran Congress leader and former Union minister, the late A B A Ghani Khan Chowdhary was the victor. In Uttarkhand, Anand Singh Rawat, son of union minister Harish Rawat won the post. In Himachal Pradesh…Virbhadra Singh’s son, Vikramaditya, polled the most votes in a controversial election.” And this story goes on in other states like Maharashtra, Chhattisgarh, Goa, Jharkhand and Tamil Nadu.
So while Rahul might want to create a structure of internal democracy within the Congress, the senior leaders who are most hurt by this, wont let him do so easily. As Ramachandran writes “The results indicate that senior leaders have used the Youth Congress to extend or defend their turfs. By getting family members into Youth Congress, they attempted to get a foot into the new Congress under Rahul.”
The other big problem with this approach is how does Rahul expect members of the Congress to be serious about internal democracy, when there has been no democracy at the top levels of the party for many decades now. He and his mother, who are the top two functionaries of the party, are a symbol of that. So in that sense its really a chicken and egg problem.
At the same time, there has been a lot of talk Rahul’s team using measurement systems to select candidates that will represent them in elections. Whatever they are doing doesn’t seem to be working. An excellent comparison here is with the Aam Aadmi Party which used a lot of data analysis in the recently held, Delhi elections. And it did so over a period of around one year since its formation. As Aloknanda Chakraborty writes in the Business Standard “The AAP…is light years ahead of its opponents in the way it has collected, analysed and used massive amounts of data to identify, connect with and mobilise potential voters for the just-concluded Delhi elections.”
Also, it is worth remembering here that the Toyota Way talks about standardised tasks. Rahul Gandhi himself doesn’t seem to be following that. He likes to take a hit and run stand on issues that he espouses now and then. (You can read the detailed argument here). In fact this is something that comes out even in Rahul’s personal behaviour. As The Times of India reports “he (i.e. Rahul) alternately comes off as aloof and warm to his colleagues.”
Given this, Rahul Gandhi does not come across as a serious politician. To me a appropriate comparison seems to be a corporate scion who wants to be a painter, but is stuck with his or her family business. Ramachandra Guha put it best when he told Firstpost in an interview “He(i.e Rahul) has no original ideas, no heart for sustained and hard work. He should find another profession.”
There are other issues also about the Toyota Way being implemented in the Congress party. As Ramachandran writes “A political party is not a corporate organisation…Election nominations are specifically distributed on a number of factors ranging from right parentage, to money and resources, and clout with influential voter blocks. How would a corporate-style performance management system be able to capture it all?”
Rahul has always maintained that what he is trying to engineer is a long term process. But it is worth remembering that running a business is not always about strategy. It is also a lot about short term tactics, especially in times of trouble. A business which stays glued only to strategy in times of trouble has a huge chance of running itself into the ground. The same stands true for a political party.
Hence, it is time for the Congress party and Rahul Gandhi to cut their losses. As The Times of India reports “Party leaders don’t dispute the need for refashioning the party. Their concern is about the timing, with many holding that the fast approaching elections leave too small a window for the ambitious experiment that Rahul seems to fancy.”
Since Rahul is a fan of the Toyota Way, he should be trying nemawashi, which is a part of the Toyota Way. As Dr Jeffrey Liker points out in The Toyota Way, one of the most authoritative books on the subject “Nemawashi is the process of discussing problems and potential solutions with all those affected, to collect ideas and get agreement on a path forward.”
If Rahul wants the Congress to survive, he should now be talking to the party old-timers, before its too late.
The article originally appeared on www.firstpost.com on December 10, 2013
(Vivek Kaul is a writer. He tweets @kaul_vivek)
Rahul Gandhi
Note to Rahul: India sucks at producing rakhis and Ganeshas
Vivek Kaul
Economist Arvind Panagariya has written an open letter to Rahul Gandhi, on the edit page of today’s edition of The Times of India. In this piece Panagariya answers Gandhi’s query to Indian industrialists, as to why India has to import ganeshas and rakhis from China and can’t produce them on its own.
Panagariya’s answer is very simple. India sucks at labour intensive manufacturing. As he writes “our top industry leaders are very comfortable doing what they do: invest in highly capital-intensive sectors such as automobiles, auto parts, two wheelers, engineering goods and chemicals or in skilled-labour-intensive goods such as software, telecommunications, pharmaceuticals and finance. The vast labour force of the nation stares them in the face but they look the other way.”
This is the major reason as to why India cannot compete with China in manufacturing rakhis and ganeshas. But some historical context also needs to be built in, in order to completely appreciate India’s lack of competitiveness on this front.
Prasanta Chandra Mahalanobis founded the Indian Statistical Institute in two rooms at the Presidency College in Calcutta (now Kolkata) in the early 1930s. He became close to Jawahar Lal Nehru, the first prime minister of India, and was appointed as the Honorary Statistical Advisor to the government of India.
As Gurcharan Das writes in India Unbound –From Independence to the Global Information Age “Mahalanobis had a profound effect on Nehru’s thinking, although he held no offcial position. His title, “Honorary Statistical Advisor to the Government of India,” certainly did not reflect the extent of his influence. His biggest contribution was the draft plan frame for the Second Five Year Plan…In it he put into practice the socialist ideas of investment in a large public sector (at the expense of the private sector), with emphasis on heavy industry (at the expense of consumer goods) and a focus on import substitution(at the expense of export promotion).”
Hence, big heavy industry became the order of the day at the cost of small consumer goods. The alternative vision of encouraging the production of consumer goods was put forward as well. As Das writes “It belonged to the Bombay (now Mumbai) economists CN Vakil and PR Brahmanand. It was neither glamourous nor as technically rigorous as Mahalnobis’s, but it was more suited to the underdeveloped Indian economy. Its starting point was that India lacked capital but had plenty of people…The thing to do was to put these people into productive work at the lowest capital cost. The Bombay economists suggested that we employ the surplus labour to produce “wage goods,” or simple consumer products – clothes, toys, shoes, snacks, radios, and bicycles. These low-capital, low-risk, business would attract loads of entreprenurs, for they would yield quick output and rapid returns on investments. Labour would produce the goods it would eventually consume with the wages it earned in producing the goods.”
But Mahalanobis’s vision of an industrialisted India sounded a lot sexier to the politicians led by Nehru who ran this country and hence, won in the end.
The Indian industrialists had done their cause no good by drafting and accepting the Bombay Plan in 1944. “In 1944, India’s leading capitalists had come together in Bombay and crystalllized their vision for a modern, independent India. They inclued the giants of Indian business – JRD Tata, GD Birla, Lala Shri Ram, Kasturbhai Lallabhai, Purshotamdas Thakurdas, AD Shroff and John Mathai – they produced what came to be known as the Bombay Plan,” writes Das.
The Bombay Plan put forward the idea of rapid and self reliant industrialisation of business in India. At the same time the businesses were willing to accept “import limitations on the freedom of private enterprise”. “Even more disastrous was their acceptance of a vast area of state control – in fixing prices, limiting dividends, controlling foregin trade and foreign exchange, in licensing production, and in allocating capital goods and distributing consumer goods. Without realising it, the Indian capitalists had dug their graves,” writes Das.
Hence, the government became the mai baap sarkar which gave out licenses for everything. And the Indian businessman if he had to survive had to become a crony capitalist to get these licenses. This was initiated during the regime of Jawahar Lal Nehru and perfected during the rule of his daughter Indira Gandhi.
The orientation of the Indian government was towards setting up big industries. What they did not want to set up themselves, they would give licenses to the private sector. And in order to get licenses a businessman had to be close to the government.
This ensured that both the government as well as the private sector set up and continue to set up capital intensive businesses. This is reflected in the slow growth of the number of workers working in private sector etablishemnts with ten or more people. As Jagdish Bhagwati and Arvind Panagariya write in their book India’s Tryst with Destiny – Debunking Myths that Undermine Progress and Addressing New Challenges. “The number of workers in all private-sector establishments with ten or more workers rose from 7.7 million in 1990-91 to just 9.8 million in 2007-2008. Employment in private- sector manufacturing establishments of ten workers or more, however, rose from 4.5 million to only 5 million over the same period. This small change has taken place against the backdrop of a much larger number of more than 10 million workers joining the workforce every year.”
Hence, an average Indian business starts off small and continues to want to remain small. “An astonishing 84 per cent of the workers in all manufacturing in India were employed in firms with forty-nine or less workers in 2005. Large firms, defined as those employing 200 or more workers, accounted for only 10.5 percent of manufacturing workforce. In contrast, small- and large-scale firms employed 25 and 52 per cent of the workers respectively in China in the same year,” write Bhagwati and Panagariya.
What is true about manufacturing as a whole is also true about apparels in particular, a very high labour intensive sector. Nearly 92.4% of the workers in this sector, work with small firms which have 49 or less workers. In comparison, large and medium firms make up around 87.7% of the employment in the apparel sector in China.
The labour intensive firms in China ensure that they have huge economies of scale. This drives down costs and explains to a large extent why India imports ganesha idols and rakhis from China. Everyone wants a good deal. And China is the country providing the good deals and not India.
A major reason for Indian firms choosing to remain small is the fact that the country has too many labour laws. Since labour is under the Concurrent list of the Indian constitution, both the state government as well as the central government can formulate laws on it. As Bhagwati and Panagariya point out “The ministry of labour lists as many as fifty-two independent Central government Acts in the area of labour. According to Amit Mitra(the finance minister of West Bengal and a former business lobbyist), there exist another 150 state-level laws in India. This count places the total number of labour laws in India at approximately 200. Compounding the confusion created by this multitude of laws is the fact that they are not entirely consistent with one another, leading a wit to remark that you cannot implement Indian labour laws 100 per cent without violating 20 per cent of them.”
This explains to a large extent why Indian businesses do not like to become labour intensive and choose to stay small. The costs of following these laws are huge. As Bhagwati and Panagariya write “As the firm size rises from six regular workers towards 100, at no point between these two thresholds is the saving in manufacturing costs sufficiently large to pay for the extra cost of satisfying the laws.”
In fact, Bhagwati and Panagariya narrate an interesting anecdote told to them by economist Ajay Shah. Shah, it seems asked a leading Indian industrialist about why he did not enter the apparel sector, given that he was already making yarn and cloth. “The industrialist replied that with the low profit margins in apparel, this would be worth while only if he operated on the scale of 100,000 workers. But this would not be practical in view of India’s restrictive labour laws.”
This is the answer to Rahul Gandhi’s question of why India imports rakhis and ganeshas from China. Like is the case with almost every big problem in this country, even this is a problem created by his ancestors.
The article originally appeared on www.firstpost.com on November 18, 2013
(Vivek Kaul is a writer. He tweets @kaul_vivek)
The history lesson Rahul Gandhi needs to take from Shashi Tharoor
Vivek Kaul
Rahul Gandhi is turning out to be a fan of trashy Hindi films of the 70s and 80s. A few days back he spoke about ma ke aansoo(tears of his mother) and yesterday it was the turn of khandan ka balidan (the sacrifices of his family). “My grandmother was killed. My father was assassinated and perhaps I may also be killed one day. I am not bothered. I had to tell you what I felt from the heart,” he said yesterday.
While, Rahul Gandhi might have been talking from his heart, it is important to understand here that his grandmother and his father were killed because of monsters they managed to create.
Indira Gandhi did not like non Congress governments being elected to power in states. Either she dismissed them or created problems for them. She ultimately had to pay a price for this. In 1977, the Akali Dal party had been elected to power in Punjab. The Akali Dal was an ally of the Janata Party which had won the 1977 Lok Sabha elections and managed to throw Indira Gandhi out of power. She came back to power in 1980 and started to create problems for the Akalis.
Shashi Tharoor, the current minister of state for human resources development, documents this rather well in India – From Midnight to the Millennium. As he writes “In 1977, the Congress Party had been ousted in Punjab by the Sikh Akali Dal Party, an ally of Janata; Mrs Gandhi typically decided to undermine them from the quarter they least expected, by opponents even more Sikh than the Akalis. So she encouraged (and reportedly even initially financed) the extremist fanaticism of a Sikh fundamentalist leader Jarnail Singh Bhindarwale. Bhindarwale soon tired of assassinating clean shaven Sikhs for their apostasy and instead took up the cause of an independent Sikh state, Khalistan,” writes Tharoor.
Ramachandra Guha alludes to the link between Indira Gandhi and Bhindarwale in India After Gandhi. As he writes “By some accounts, Bhindarwale was built by Sanjay Gandhi and the union home minister Zail Singh (himself a former chief minister of Punjab) as a counter to the Akalis. Writing in September 1982 the journalist Ayesha Kagal remarked that the preacher(i.e. Bhindarwale) ‘was originally a product nurtured and marketed by the Centre to cut into the Akali Dal’s ‘sphere of influence’. The key word here is ‘originally’. For whoever it was who first promoted him, Bhindarwale quickly demonstrated his own independent charisma and influence. To him were attracted many Jats of a peasant background who had seen the gains of the Green Revolution being cornered by the landowners. Other followers came from the lower Sikh castes of artisans and labourers.”
Bhindarwale soon started operating out of the Golden Temple. As Guha writes “He(i.e. Bhindarwale) had acquired a group of devoted gun-totting followers who acted as his acolytes and bodyguards and, on occasion, as willing and unpaid killers.”
The situation soon got out of hand and Indira Gandhi had to send the army into the Golden temple where terrorists led by Bhindarwale were holed in. In fact, Bhindarwale had moved into the Akal Takht(the throne of the timeless one), from where the Sikh gurus had issued their hukumnamas, which the Sikhs were supposed to follow.
“Mrs Gandhi had little choice but to destroy the monster she had herself spawned, and she finally violated a basic tenet of the Indian state by sending armed troops into a place of worship, the historic Golden Temple in Amritsar, to flush out terrorists holed up there,” writes Tharoor.
Bhindarwale was killed in the fighting that followed the Indian army entering the Golden Temple. Tavleen Singh recounts a conversation she had with General K.S. ‘Bulbul’ Brar who was directly incharge of what came to be known as Operation Bluestar, in her book Durbar.
Here is how the conversation went:
‘Is the Sant (i.e. Bhindarwale) dead?’
‘Yes.’
‘How did he die?’ ‘Crossfire. Early in the morning on the second day he walked out of the Akal Takht with General Shabeg and Amrik Singh, and they fell.’
‘Did the fighting stop immediately after that?’
‘It did. But we lost a lot of men…and the Akal Takht is badly damaged. We had to use tanks and heavy artillery. It was a mess.’
‘In the villages they say Sant is still alive. Where is the rumour coming from?’
General Brar frowned and looked wearily at his officers. ‘This is a problem,’ he said, ‘we’re not sure how to deal with it. He’s dead.’
The attack on the Golden Temple proved to be a disastrous move. As Tharoor points out “The assault on the Golden Temple deeply alienated many Sikhs whose patriotism was unquestionable; the Gandhi family’s staunchest ally in the independent press, the Sikh editor Khushwant Singh, returned his national honours to the government, and a battalion of Sikhs, the backbone of the army, mutinied.”
The attack on the Golden Temple ultimately led to the assassination of Indira Gandhi on October 31, 1984. “Mrs Gandhi never understood the extent to which so many Sikhs saw Bluestar as a betrayal. She refused to draw the conclusions her security advisers did, and to her credit turned down their recommendations to remove Sikhs from her personal guard detail. Two of them, men sworn to protect her with their lives turned their guns upon her instead…but her real fault lay in having created the problem in the first place and in letting it mount to the point where the destructive force of “Operation Bluestar” seemed the only solution,” writes Tharoor.
Operation Bluestar also ended up exacerbating the Punjab problem. As Singh points out “It soon became clear that the operation to save the Golden Temple had been a disaster. It was clear to the army, to journalists and to most political analysts….Far from ending the Punjab problem Operation Blue Star served served to dangerously exacerbate it and to deepen the divisions between Hindus and Sikhs.”
Like Bhindarwale in Punjab, the Liberation Tigers of Tamil Eelam(LTTE) was also a monster helped to flourish by the Indian state. Guha deals with this in detail in India After Gandhi. “Of the several Tamil resistance organizations, the most influential and powerful were the Liberation Tigers of Tamil Eelam(LTTE). Led by a brutal fighter named Velupillai Prabhakaran, the LTTE had as its aim a separate nation, to be constituted from the north and east of the island, where the Tamils were in a majority…LTTE fighters had long used the Indian state of Tamil Nadu as a safe haven. Their activities were actively helped by the state government with New Delhi turning an indulgent eye.”
As we all know New Delhi was first run by Indira Gandhi and then her son Rajiv, grandmother and father of current vice president of the Congress party, Rahul Gandhi.
In 1987, Rajiv Gandhi made the disastrous decision of sending the Indian Peace Keeping Force to end the conflict in Sri Lanka. And this finally led to his assassination on May 21, 1991.
The point here is that the father and the grandmother of Rahul Gandhi were not martyrs, as he tried to project them as. They ended up paying for the huge mistakes that they made.
Rahul Gandhi also said in reference to the BJP “ye rajneetik laabh ke liye chot pahunchate hain.(they hurt people for political gains.)” It is worth reminding Rahul about what his father Rajiv said in reference to the riots that happened after the assassination of Indira Gandhi. “When a big tree falls, the earth shakes.”
Trying to create fear and sympathy in the minds of people is a time tested political strategy, which politicians resort to, when they run out of ideas. Rahul Gandhi is just trying to do that.
The article originally appeared on www.firstpost.com on October 24, 2013
(Vivek Kaul is a writer. He tweets @kaul_vivek)
With onion touching Rs 100 per kg, food security is a joke
Vivek Kaul
Rahul Gandhi, aspiring politician and vice-president of the Congress Party, recently said that his mother cried when she couldn’t cast her vote on the Food Security Bill. Of course, the tears of a mother are precious to any son. But what about the tears in the eyes of the aam aadmi as onion prices touch Rs 100 per kg, in some parts of the country?
As per the recently released wholesale price inflation numbers, the price of onion has risen by 323% in the last one year. Vegetable prices during the same period went up by 89.37%. Fruits were up at 13.54%. And all in all food prices were up by 18.4% in comparison to the same period last year.
So why have onion prices been rising at such a rapid rate? Research Analysts Neelkanth Mishra and Ravi Shankar have some sort of an answer in a report titled Agri 101: Fruits & vegetables—Cost inflation dated October 7, 2013. A few states dominate the production of vegetables. “In particular, Maharashtra dominates the onion trade (45% of national production by value), while West Bengal produces 38% of India’s potatoes, 49% of India’s cauliflower and 27% of India’s aubergines (brinjals),” write Mishra and Shankar.
And it is this concentration that creates problems. As the Credit Suisse analysts point out “This concentration creates problems in generating a nationwide supply response in case a particular geography sees bad weather or any other disruption (e.g., onions in Maharashtra). This also drives significant variation in prices across the country.” Rains had damaged the rabi crop of onions, which is produced between March and May. The kharif crop of onions has also been damaged by unseasonal rains. This crop starts coming into the market by the end of September.
But has this led to a shortage of onions in the country? R P Gupta, director of National Horticulture Research & Development Foundation told the Week magazine recently that “I have been saying since July that there is no shortage of onion in the country..Official figures show that 27.5 lakh metric tonnes of onion were stored during February and May. Monthly consumption of the country is only 7-8 lakh tonnes per month…. So, where was was the problem of shortage?”
The only possible explanation is hoarding by traders in the key onion producing state of Maharashtra. As is well known the Agricultural Produce Marketing Committee (APMC), which runs the onion trade in Maharashtra, is largely said to be controlled by Sharad Pawar’s Nationalist Congress Party.
As the Week article points out in the context of the Lasalgaon mandi in Nashik, Asia’s largest wholesale market for onions “Powerful traders…manipulate the market. They book stocks from farmers at low prices, much in advance. Thousands of tonnes of onions are hoarded to create a short-supply. And as the prices spiral up, the hoarded stocks are released. It was such an artificial scarcity that allegedly spiked onion prices to record highs. “Traders in Lasalgaon Agricultural Produce Market Committee alone earned more than Rs.150 crore in just four days (August 12-15) this year,” says Dr Giridhar Patil, a farmer-activist.” This explains to a large extent why onion prices have been high all through the year.
The supply chain for the onion to move from the farmer to the end consumer remains very weak. As a recent Wall Street Journal article pointed out “A cultivated crop by a farmer in a far-flung village goes through as many as four intermediaries before reaching the local vegetable market in a semi-urban or urban area. These middlemen, wholesalers, traders and commission agents, usually charge fees and analysts estimate that by the time the vegetables make it to the stands in a retail market, their price has increased by almost six times.” This explains to a large extent why at times there is no link between the wholesale price of onions and the final price at which you and me buy it at. s
The Times of India reports that on October 22, 2013, the average wholesale price of the new onion crop at Lasalgaon was Rs 3,900 a quintal. This was 37% cheaper than in the summer. Despite this, prices at the retail level have not dropped.
NCP boss Sharad Pawar, who also happens to be Union Minister of Agriculture, had said on September 17, 2013 that “There is a lot of talk about the rise in onion prices; however, when prices fall no one shows any concern for the farmers. When farmers are getting more money for their produce we should not complain.”
Now if onion is coming in at Lasalgoan mandi in Nashik at Rs 3900 per quintal or Rs 39 per kg, and selling in Delhi at Rs 100 per kg, how is the farmer gaining? As explained above, it is the middlemen who are making the bulk of the money.
In fact, a study commissioned by the Competition Commission of India(CCI) in 2012, came to a similar result. The study titled Competitive Assessment of Onion Markets in India found that “onion trade is unilaterally dictated by the traders and not farmers for the reasons: (i) Average farm size of onion growers is quite low. Unfavorable weather conditions and price risk for these small farmers resulted for a minimal role in price formation; (ii) Traders buy small lots from the market yards and pool the produce for sorting or grading at their packing houses and market different grades to different markets all over India. Lack of trading expertise, market knowledge and risk bearing capacity has prevented most of the farmers to make any dent in onion trading. Therefore, most of the trading is in private hands; (iii) Farmers generally take reference of the local markets‟ rates, while traders compare rates of all markets, including major distant and export market and then decide where to send their produce of a particular grades. This brings greater profits to them…(vi) Lack of capacity to conduct multiple roles (wholesaler and commission agent) prevents farmers and their organizations to compete with traders.”
Also, most farmers, unlike traders do not have storage facilities. So they end up selling onions as soon as they produce it. The Week report cited earlier points out “This year, however, almost 80 per cent of the rabi crop was bought by traders (in the Lasalgaon mandi) at Rs.800 to Rs.1,200 a quintal by February-March. So, only a maximum of 20 per cent of the total crop was left with farmers who had storage facility.”
In fact, these traders even collude to drive up prices. As the CCI study found out “Collusion was observed among traders in selected markets in Maharashtra and Karnataka, For instance, a visit to Ahmednagar APMC revealed that there was collusion amongst traders. While bidding on certain lots was taking place, traders started with about Rs 300 per quintal and kept bidding higher prices till one trader quoted Rs 400 per quintal and another bid at Rs 405 per quintal. The commission agent stopped the auction and produce was shared between two wholesalers. It should also be pointed out that in Vashi market about 60 per cent of farmers reported that sales were undertaken through secret bidding.” The APMC markets referred to above are controlled by the NCP.
So farmers are not the ones benefiting from an increase in onion price, even if Pawar wants us to believe that is the case. Also, even if one believes that the farmers in Maharashtra are benefiting what about farmers in other states of India? Aren’t they paying a significantly higher price for onions? The last that I checked Sharad Pawar was the agriculture minister of India and not Western Maharashtra.
The reaction of the government to this rise in onion prices has been very high handed. The telecom minister Kapil Sibal, when he was asked on September 17, if onion prices will rise further, had said “Why don’t you ask the traders this? The government is not the one selling onions,”.
This was the last thing one expected a senior minister in the UPA government, which has been very committed to the idea of food security, to say. Onion is an essential ingredient in almost all curry that Indians make, whether it is to cook vegetables or meat. And given that, it is an important part of food security.
Onion prices have rise at the rate of 323% per year. The vegetable prices have risen at the rate of 89% per year. The food security of the aam aadmi is in danger as the government sits around doing nothing as usual. Half of the expenditure of an average household in India is on food. In case of the poor it is 60% (NSSO 2011).
Rahul Gandhi in a recent speech in Madhya Pradesh had said “They don’t understand that one can’t talk of development when the stomach is empty.” He had also said that “we understand your hunger.” Does he?
Or does the government want to supply rice at Rs 3 per kg and wheat at Rs 2 per kg, to two thirds of the country, so that people can buy onions at Rs 100 per kg? The joke as usual is on us.
The article originally appeared on www.firstpost.com on October 23, 2013
(Vivek Kaul is a writer. He tweets @kaul_vivek)
What media missed out on in Rahul Gandhi's “escape-velocity” speech
Vivek Kaul
Nitpicking is not a good habit I am told.
But there are times when the opportunity is too good to resist.
Rahul Gandhi in a recent speech which has become famous as the “escape velocity” speech said “To Jupiter ki escape velocity kya hoti hai? Agar koi Jupiter pe khada hai aur Jupiter ki kheech se nikalna ho to use 60 km/sec ki acceleration chahiye. (So what is the escape velocity of Jupiter? If you are standing on Jupiter you need to go at 60 km/sec).”
Rahul had defined escape velocity a little earlier in his speech. “Escape velocity matlab agar aap ne dharti se space mein jana hai… agar aap hamari dharti pe hai to 11.2 km per second aap ki velocity honi padegi. (There is a concept of escape velocity if you want to go into space from Earth… your velocity has to be 11.2 km/sec).”
There is a very basic flaw in this small lecture on escape velocity. Acceleration and velocity are two different concepts. As Rahul said “Agar koi Jupiter pe khada hai aur Jupiter ki kheech se nikalna ho to use 60 km/sec ki acceleration chahiye.”
The word to be used here was velocity and not acceleration. Acceleration, as anyone who has studied basic eight standard physics will tell you, is the rate of change of velocity per unit of time. Lets consider the following table which shows the velocity of a moving object:
As we can see clearly from the above table, the velocity is constantly going up at the rate of 5 metre per second, in each second of time. Hence, the object has an acceleration of 5 metre per second squared (m/s2).
So that is the difference between velocity and acceleration. They are two different words, with two different meanings, which cannot be used interchangeably.
So that was the nitpicking bit.
The “escape velocity” comment has been a subject of lot of ridicule since it was first made. But there was a bigger joke in Rahul Gandhi’s speech, which people haven’t latched onto. He recounted a story that his late grandmother Indira Gandhi had told him about how she had cheered a team playing an ice hockey match against Germany, which was then ruled by Adolf Hitler. As Rahul said “It was a match between Germany and some other team. The other team was being thrashed and the crowds were cheering….My grandmother (Indira Gandhi) felt very bad and got up to cheer the weak team, but was shouted at. She sat down out of fear.” (As reported in The Time of India)
“The whole stadium (full of Germans) shouted against her. She sat down in fear but decided that never again in her life she will ever sit down in fear… If somebody is doing anything wrong never sit down,” Rahul said (As reported in The Telegraph). This it seems had an impact on Indira Gandhi and she resolved never again to be cowed down, while doing what she thought was right.
This is the bigger joke in the speech. Indira Gandhi only did those things that ensured that she continued to be in power. She destroyed the democratic institutions in this country. The lack of governance today in India is because of all that she did when she was the Prime Minister. As Gurucharan Das told me in an interview last year “The damage that Indira Gandhi did was far greater. Her license raj combined with the mai baap sarkar, this double whammy gave the illusion to the people that the state would do everything…The second was the damage she did to our political institutions…During the period she was the Prime Minister, I think she dismissed fifty nine elected governments in states…She tried to change India’s culture and change our political system. A lot has been written about the emergency and so on. But the enduring damage we don’t realise. Before her, Chief Ministers were a little afraid when a secretary said no sir you can’t do this. And if you tried to do it, the secretary wouldn’t bend very often. Now they just transfer…Also after Indira Gandhi the police became a handmaiden of the executive. The police lost its independence. Even the judiciary was damaged. She wanted committed judges.”
Other than destroying the democratic institutions of this country she turned the Congress party, into a party which thrives on chamchas and chamchagiri. Historian and writer Ramachandra Guha explains this in an essay titled A Short History of Congress Chamchagiri which is a part of his book Patriots and Partisans.“Most Indians are too young to know this, but the truth is that until about 1969 the Congress was more or less a democratic party,” writes Guha.
Indira Gandhi had been planning to settle in Great Britain. After Nehru died in May 1964, she was invited to join the cabinet as the minister of information and broadcasting by Lal Bahadur Shastri who took over as the next prime minister.
“When Shastri died in January 1966, Mrs Gandhi was, to her own surprise, catapulted into the post of the prime minister. There were other and better candidates for the job, but the Congress bosses (notably K Kamraj) thought that they could more easily control a lady they thought to be a gungi gudiya (dumb doll),“ writes Guha.
But she was not a gungi gudia and made all the right moves to consolidate her power and finally split the Congress party in 1969 and what was a essentially a decentralised and democratic party till that point of time became an extension of the whims, fancies and insecurities of a single individual.
Thus started an era of chamchas and chamchagiri in the Congress. Dev Kant Baruah who was the President of the Congress Party between 1975 and 1977 went to the extent of saying “Indira is India and India is Indira”. What was loyalty to the party earlier became loyalty to the individual and the family.
Also, Indira Gandhi took total control over the system effectively overriding democracy and imposing emergency on June 26, 1975. During this period she also formed a mini government within the government. This effort was led by her PN Haksar, her civil service secretary.
As veteran journalist Kuldip Nayar recounts in Emergency Retold “Haksar…organised the system in such a way that everything would revolve around the prime minister’s secretariat. Not even a deputy secretary was appointed without its concurrence. He set up a mini government…Haksar’s main contribution was that he politicized the setup, in the sense that for the first time in the country’s post independence history, government machinery came to be used for political purposes, if need be for Congress party purposes.”
The prime minister’s office is currently run by Pulok Chatterjee, who was earlier the officer on special duty to Sonia Gandhi.
Getting back to the emergency, Indira’s mini government had total control over how the system worked. A famous cartoon made by Abu showed President Fakhruddin Ali Ahmed in his bath during the emergency signing ordinances and saying “if there are any more ordinances just ask them to wait.”
Indira Gandhi also ensured that the Congress party effectively became a family run concern. As Guha writes in the essay Verdicts on Nehru “Mrs Gandhi converted the Indian National Congress into a family business. She first bought in her son Sanjay, and after his death, his brother Rajiv. In each case, it was made clear that the son would succeed Mrs Gandhi as head of Congress and head of government.”
Once the model was established firmly in the Congress party, it spread to most other political parties. “Indira Gandhi’s embrace of the dynastic principle for the Congress served as a ready model for other parties to emulate…The DMK was once the proud party of Dravidian nationalism and social reform; it is now the private property of M Karunanidhi and his children…Likewise, for all his professed commitment to Maharashtrian pride and Hindu nationalism Shiv Sena leader, Bal Thackeray could look no further than his son. The Samajwadi Party and Rashtriya Janta Dal claimed to stand for ‘social justice’, but the leadership of Mulayam’s party passed onto his son and in Lalu’s party to his wife,” writes Guha.
In doing what she did Indira Gandhi basically destroyed Indian democracy. Indeed, if she had not done what she did, Rahul Gandhi would not be the vice-president of the Congress party. He would at best be a middle level manager of a private sector company (as Guha puts it). Rahul Gandhi is honest enough to realise this. In October 2008, while addressing girl students at a resort near Jim Corbett National Park, Rahul Gandhi referred to “politics” as a closed system in India. “If I had not come from my family, I wouldn’t be here. You can enter the system either through family or friends or money. Without family, friends or money, you cannot enter the system. My father was in politics. My grandmother and great grandfather were in politics. So, it was easy for me to enter politics. This is a problem. I am a symptom of this problem.”
Hence, it is not surprising Rahul is inspired by what his grandmother, Indira Gandhi, told him. If it was not for her, he would be largely irrelevant today. He would pop up in the media once in a while, as a subject of stories on what are the descendants of Indira Gandhi doing today. Meanwhile, Rahul’s “bigger” joke, I talked about initially, is really on us, the citizens of this country.
(Vivek Kaul is the author of Easy Money. He tweets @kaul_vivek)
